==2009 midterm 1 version 4==

==2009 midterm 1 version 4== - Page 1 of 11 McMaster...

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Page 1 of 11 McMaster University Department of Economics ECON 1B03 Midterm Test #1 VERSION 4 Instructor: Professor H Holmes Duration: 1.5 hours Total Number of Pages: 11 INSTRUCTIONS : Answer all questions on the scan sheets. USE AN HB PENCIL ONLY. Make sure you carefully fill in the bubbles. YOU MUST FILL IN YOUR STUDENT NUMBER, AND VERSION NUMBER ON THE SCAN SHEET OR YOUR GRADE WILL NOT BE RECORDED AND YOU WILL LOSE THE BONUS MARK. You may use the Casio FX calculator. Hand in the scan sheet and this test copy. TOTAL MARKS AVAILABLE : 45 NAME:____________________________________________________ STUDENT #: _______________________________________________ MUGSI ID: ________________________________________________

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Page 2 of 11 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. A person's expectations about the future a. cannot affect demand because expectations change. b. can affect future demand. c. can affect current demand. d. cannot shift a demand curve. ____ 2. You have decided to purchase a new Mustang convertible. A friend tells you that Ford will be offering a \$3000 rebate on Mustangs starting next month. As a result of this information your demand a. could shift either right or left. b. for Mustangs shifts right today. c. curve will be unaffected. d. for Mustangs shifts left today. ____ 3. Which of the following is NOT a determinant of demand? a. the price of a resource b. the price of a complementary good c. the price of the good next month d. the price of a substitute good ____ 4. If a study by the AMA found that brown sugar caused weight loss while white sugar caused weight gain we would see a. an increase in demand for brown sugar and a decrease in demand for white sugar. b. no change in either demand because weight loss is not a nonprice determinant of demand. c. an increase in demand for brown sugar, but no change in the demand for white sugar. d. a decrease in the demand for white sugar, but no change in the demand for brown sugar. ____ 5. Other things equal, when the price of a good rises, the quantity supplied of the good also rises. This is the law of a. increasing costs. b. diminishing returns. c. supply. d. demand. ____ 6. The unique point at which the supply and demand curves intersect is called a. market unity. b. an agreement. c. cohesion. d. equilibrium.
Page 3 of 11 Figure 4-10 ____ 7. Refer to Figure 4-10 . Graph A shows which of the following? a. an increase in demand b. an increase in quantity demanded c. an increase in quantity supplied d. All of the above are correct. e. Both a and c are correct. ____ 8. Whenever the price of a good changes, there a. is a change in supply and demand. b. would be a movement along a supply curve and/or demand curve.

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==2009 midterm 1 version 4== - Page 1 of 11 McMaster...

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